UK GDP: where economic growth is coming from

What's driving the UK economy, and what's dragging it down? We take a closer
look at the different components of GDP.

When the UK services sector is doing well, the economy as a whole tends to perform strongly. This is because the sector powers more than three-quarters of the economy.

Services, which encompasses everything from hotel workers to bankers and accountants, grew by 0.6pc in the first three months of the year, initial estimates showed on Thursday.

The Office for National Statistics (ONS) said that output in the first quarter increased across the board, with a particularly strong performance in the hotels and restaurants sector, from car sales, when the new "13" number plate was released, and an increase in "legal activities".

Services had grown strongly in the third quarter of 2012, largely due to a big boost from the London 2012 Olympics. Once the effects had worn off in Q4, output remained flat.

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CONSTRUCTION

Although construction data are considered notoriously volatile and are often revised, there is one thing that is still clear: the sector has not fared well since the start of the financial crisis.

More recent data had shown that construction, which contributes around 7pc towards total economic output, had started growing again after five consecutive quarters of falls. In the fourth quarter of 2012, construction firms grew by 0.8pc, following a decrease of 1.8pc in the third quarter.

However, Thursday's figures showed that the sector was back in decline, with a 2.5pc fall in output in the first three months of 2013.

INDUSTRY AND MANUFACTURING

The level of industrial production in Britain is now at the lowest level since 1991 and around 15pc below the pre-recession peak.

The recent weak data are largely due to reduced output at Britain's oil and gas fields. The ONS said the poor industrial figures in January were driven by a 4.3pc decline in oil and gas extraction, when production at the North Sea's Schiehallion platform was suspended because of building work.

The platform, which accounts for between 3pc and 6pc of total oil production, could be closed for up to five years.

The 0.3pc GDP contraction in the final three months of last year was also mainly due to fact that the Buzzard oil field, located 55km off the coast of Scotland, was closed for maintenance for much of that period. Buzzard is the North Sea's largest oil field, and the shutdown led to a 10.7pc drop in production over the period.

On Thursday, the ONS said that a recovery in North Sea oil production had helped the sector to eke out 0.2pc growth in the first quarter.

However, manufacturing fell by 0.3pc over the quarter, following a 1.4pc decline in the final three months of 2012.

<noframes>Interactive chart: UK industry held back by North Sea output</noframes>